Multifamily Starts Hit Ten-Year Low
After two consecutive strong months, starts in buildings with five or more apartments dropped precipitously in December. Although it's generally advisable to avoid reading too much into a single month-to-month change, the December decline was striking. The Census Bureau's preliminary (seasonally adjusted annual) five-plus starts rate came in at 196,000, which represents  the lowest  rate  posted since July 1994. The 196,000  December rate was down 41% from the previous month, the largest one-month drop since January of 1994. The 196,000 rate also was down 42% from December 2006, the largest year-over-year decline in the monthly five-plus starts rate since March 1993.

Source: U.S. Census Bureau; NAHB Economics Group

With the December numbers in, we now have a preliminary estimate of 275,700 total five-plus starts in 2007, which would be down about 6% from 2006. If that holds up, it will be the weakest annual starts number for five-plus starts since 1996 (although still well above the trough of the early 1990s). Meanwhile, the preliminary estimate for new five-plus permits issued during 2007 is 345,600, down about 9% from 2006. NAHB's five-plus housing forecast has been revised, but not drastically. The revised forecast projects that there will be approximately 250,000 five-plus starts in 2008 and 260,000 in 2009. [ return to top ]